Podcast #28 – “App Economy”

The new iPad further strengthens the foundation of the app economy, there are more iOS-related jobs than ever before and my guest on this show is Martin Pilkington who just sold an app to get his own app economy in order. And the latest -Gate in Apple’s history is Open-Streetmap-Gate.

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Show Notes

Apple commissioned a study by Analysis Group about their impact on the US Economy. Based on the results Apple launched an interesting page which summarizes the facts.

“[The study] found that Apple has directly or indirectly created 304,000 U.S. jobs.*These jobs — spread across all 50 states — include thousands of jobs in numerous industries, from the people who create components for our products to the people who build the planes and trucks that carry them to our customers. For example, this figure also includes workers in Texas who manufacture processors for iOS products, Corning employees in Kentucky and New York who create the majority of the glass for iPhone, and FedEx and UPS employees. Together with the 210,000 iOS jobs generated by the app economy, these 304,000 jobs make a total of 514,000 U.S. jobs created or supported by Apple.

With more than 550,000 apps and more than 24 billion downloads in less than four years, the App Store has created an entirely new industry: iOS app design and development. The app revolution has added more than 210,000 iOS jobs to the U.S. economy since the introduction of iPhone in 2007.And Apple has paid more than $4 billion in royalties to developers through the App Store. We also provide app developers with the tools and distribution they need to bring their best ideas to tens of millions of iOS customers worldwide.

The number of Apple jobs based in the U.S. has more than quadrupled over the past decade, from less than 10,000 employees in 2002 to more than 47,000 today. That number more than doubles again when we include vendors that employ more than 50,000 people who directly support Apple. These jobs require people with a wide variety of skills — including construction workers, component manufacturers, retail specialists, tech support representatives, salespeople, marketers, and the best hardware and software engineers in the world.”

Then they also mention how almost all of the 246,000 retail employees are full time and not seasonally hired. And how proud they are of having their telephone support based in the US instead of india, where it would cost half as much.

Pxldot.com has a great analysis how soon after launch customers will have updated their devices to a new iOS version. They correlate it also with how the story looks on Android, but what’s most interesting for us iOS developers is this: about 20 weeks after release 75% will have upgraded. And about 40 weeks after launch you can assume that almost 100% of devices will be on the new iOS version. Then there is a long tail of some devices that never will get updated. Like the original iPhone I gave to my in-laws as a normal mobile phone. Those are dropping off around 3% per week.

Today we are at 21 weeks after launch of iOS 5 and on the chart you can see that indeed iOS 5 is around slightly more than 75%. There are two nice learnings from from this: If you start a new project it almost never makes sense to support iOS versions that are older than the previous major release. And if you are planning ahead and for example plan for a launch in 3 months then you can even not bother with iOS 4.

Long story short, we are extremely lucky that Apple apparently has a strategy that gets the software modernized as quickly as possible contrary to Android where so many factors prevent a quick and wide-spread adoption of new versions of the OS.

Somebody should maybe make a website that takes this formula and counts down the approximate percentage of devices on a a given iOS version.

The same Martin Pilkington which I am going to interview in a few minutes launched fixradarorgtfo.com which about 300 developers are supporting so far. The idea is to demonstrate to Apple that we developers would like for them to improve the bug reporting site aka Radar. To join the effort all you have to do is create a new radar, copy in the open letter featured on the site and – if you like – add the bug number and your name to the ever growing list of supporters.

Let me read the first few paragraphs:

“The only way to really communicate with Apple about what is broken and what we want is Radar. But Radar sucks, and has done for a very, VERY long time. This puts a lot of people off filing radars. The user interface is awkward and slow. We have to stop what we’re doing and go to a web UI that still thinks we’re running Mac OS X 10.1, that makes it awkward to look at bugs we’ve already filed and generally is un-Apple-like.

Radar is also a black hole. We file radars and we’re lucky to hear back about them. The majority of radars are either left untouched or marked as duplicates of other radars we cannot see. We may get a request for more information from engineering, but sometimes it is for irrelevant information or information already given in the original report. All this makes us feel like our radars make little difference. And this is important as our time is valuable.

We are contractors and every minute spent filing radars is time not spent doing client work. We are employees and every minute spent filing radars is time not spent writing code for our employers. We are indies and every minute spent filing radars is time not spent writing great apps for our users. We are hobbyists and every minute spent filing radars is time spent not doing our hobby and enjoying ourselves. We are all developers and every minute spent filing radars is time spent not making the great applications that show off how your platforms can be so much more than just what you ship to customers.”

After the 25-billionth app was downloaded Apple released lists of the all-time top iPhone and iPad apps, both free and paid. Dan Frommer from SplatF analyzed the list and came up with some interesting facts:

Angry Birds is 3 of the top 10 paid iPhone apps — nos. 1, 5, and 8. And 3 of the top 25 free iPhone apps. And 3 of the top 10 paid iPad apps. And 3 of the top 25 free iPad apps. Just incredible.

3 of the top 12 paid iPad apps are “office” apps — Apple’s iWork suite of Pages (no. 1), Numbers (no. 11), and Keynote (no. 12). Clearly there is demand for these types of apps, and Microsoft Office is missing out.

None of the top apps are “location based services” — unless you count MotionX GPS, Google Earth, or Groupon.

4 of the top 10 paid iPhone apps — Angry Birds, Fruit Ninja, Words With Friends, and Angry Birds Rio — also have free versions in the top 25 free iPhone apps.

7 of the top 10 free iPhone apps have blue as their dominant icon color. (Only one, Netflix, has no blue at all.)

Instagram, a relatively young app, made it to no. 19 in free iPhone apps. That’s pretty impressive. And Facebook‘s newish iPad app already made it to no. 17 in the free iPad apps. (Two third-party Facebook apps also made it into the top 25 free and paid iPad apps, reflecting the void Facebook left unfilled for so long.)

I’m surprised to see Bump so high in the top free iPhone apps (no. 14). Do people actually use this app? Have never seen it.

iBooks seems to have been excluded from this list. Or is the Kindle iPad app — no. 5 in the free iPad apps list — really the only one in the top 25? Seems like a strange exclusion.

Average current price of the top 25 all-time paid iPhone apps: $1.51. Average current price of the top 25 all-time paid iPad apps: $5.59.

So successful iPad apps are more than 3 times as expensive as iPhone apps. Would you have expected that?

The big news this week – obviously – was the announcement of the new iPad, no number. And an Apple TV hockey puck that has a new UI and is able to place 1080p. No surprises. There still is a home button and now there’s finally really a device that will make use of the @2x images you’ve been putting into your iPad apps since last fast. You have been shipping Retina-capable iPad apps, right?

Right on the heels of the keynote apple emailed all makers of Catalog apps and informed them that they catalogs had been moved to the new Catalogs section on iTunes. This was of special interest to me because 18 of the apps mentioned on the front page use my iCatalog.framework. We welcome this move, even though Apple decided to do that behind our backs, because it makes it easier for customers to find our catalogs and also we have a more direct comparison to our competitors. Previously catalog apps where dispersed in a multitude of categories, which made it impossible to rank them against each other.

Apple has released iPhoto for iPhone and iPad. In the new Photo Journals feature Apple is not using map tiles from Google, but instead is using OpenStreetmap data with their own custom tiles. So writes OpenStreetMap on their blog. Though Apple seems to have forgotten to add the necessary credit. OpenStreetMap writes:

“It’s also missing the necessary credit to OpenStreetMap’s contributors; we look forward to working with Apple to get that on there.”

OpenStreetMap-Gate! Both Google and OpenStreetMap require that map tiles have an annotation of the source. Apple obviously wanted to be able to omit this source information because it looks ugly on people’s photo journals. So Apple bought mapping company Poly9 in July 2010. This was the second mapping company they acquired after buying Placebase just one year earlier. One of these two companies seems to have been secretly copying data from OpenStreetMap and passing it off as their own. The data in question seems to be from early 2010, so that might have been one final desperate attempt by Poly9 to look more attractive to Apple. Which worked.

The latest fake app in a long series of scam apps is “Counter Strike” which has a description and screenshots that lead you to believe you are indeed purchasing the well-known shooter. But its a scam. The actual app you get might be a game of some sort, but it is NOT the real counter strike. The loophole seems to be that you can change description and screenshots after getting approval for an app. Apple checks to see if you app matches your description and will reject the app if it doesn’t. This way you can sneak in any app and do a bait-and-switch right under everybody’s nose. This app is rated “9+ for infrequent/mild realistic violence”, probably to warn you that this developer is out to violently abuse your your wallet.

I fear that this will eventually lead to Apple disabling the ability to modify the description and screenshots after approval. Just because somebody peed in the pool everybody loses out. Unfortunately there is no way to directly inform Apple about such scam apps. Only if you already fell victim you can follow the guide in an knowledge base article How to report an issue with Your iTunes Store purchase. So definitely ask for your money back and inform them that the app does not match the description. If enough customers do that then Apple will pull the app.

Martin Pilkington

We chat about how Martin become a professional iOS and Mac developer and what led to him selling his Storyboard app to a friend.